Not intentionally! I was trading BROD since it was at the low end of its historic range and had fat premiums. To me, this stock looked like a great candidate for a naked put write. When I priced it out, though, the calls were selling at even higher premiums than the puts, so I decided to do a covered write instead. It's a stock I would have bought on its price and fundamentals alone. The fact that it became a takeover target was pure dumb luck. In retrospect, I should have forgotten about writing the calls!
Generally, I let the arbs play the takeover rumors since, as you astutely point out, they can fall apart at any time without notice!
Aaron
PS: Like BROD, there are some other SOLID techs at the low ends of their historical ranges. I have my eye on KLAC, SEG, and AMAT. I'm waiting for 25 on KLAC, 20 on SEG, and 28 on AMAT. If they get to these prices, and if the call premiums are sufficiently fat, I'll probably implement either the buy-write or naked put write strategy on them too! I was also looking at SCH at 30-31, but became distracted by too much other stuff; when I looked again they were at 36 and change! |
